Panganiban Beautification and Upgrading Project.
Key Points
- Rationale: The city government leased a property from the Philippine National Railways (PNR) along Panganiban Drive in 1992. The city then subleased the property to private businesses for commercial use. The project has been in operation for over 30 years, and the city government believes the current rental rate of ₱6.50 per square meter—in effect since 2004—is no longer reflective of the property’s significantly increased fair market value. The ordinance aims to correct this “subsidized occupation” and generate more revenue for public services.
- New Rental Rate: The new monthly lease rental rate will be ₱270.00 per square meter, effective January 1, 2026. This amount is half of the prevailing rental rate of ₱540.00 per square meter determined by the City Assessor’s Office on July 11, 2025. The lower rate accounts for the fact that the lessees constructed the buildings themselves.
- Future Adjustments: The rental rate is subject to a 10% escalation every three years.
- Penalties: Failure to pay the monthly rental on time will result in a 25% surcharge on the unpaid amount, plus a 2% monthly interest on both the unpaid rental and the surcharge. The City Mayor is authorized to take legal action, including the closure of a building, for non-compliance12.
- Administrative Responsibilities: The City Treasurer’s Office is responsible for issuing new lease contracts by December 1, 2025, and for the collection of rent and the imposition of penalties.
- Subordination Clause: All individual lease contracts between the city and lessees are subordinate to the main contract between the City Government of Naga and the PNR. Their validity depends on the continued effectiveness of the city’s lease with the PNR.
- Effectivity: The ordinance will take effect ten days after being posted at city hall and in at least two other conspicuous locations in Naga City.